Select Committee on Standards and Privileges Seventh Report

Annex E

Letter to the Parliamentary Commissioner for Standards

from Sir Michael Scholar KCB, Permanent Secretary, Department of Trade and Industry

Thank you for your letter of 21 March.

I said to you on the telephone when we spoke about this subject on 21 March that I thought that there would be legal problems about our disclosing information secured under Section 447 of the Companies Act 1985. I have, on receipt of your letter, had this carefully checked, and I am now in a position to answer your question authoritatively, as follows.

The fruits of a section 447 investigation include information obtained by the use of compulsory powers; information volunteered to the investigator; and thirdly the hypotheses, opinions and judgements of the investigator; including his judgements as to the facts. In addition to the statutory prohibition in section 449 of the Companies Act 1985, there are legal constraints on the disclosure of material volunteered in confidence; and on the publication of the opinions of investigators.

I am advised that as the law and facts stand there is no gateway allowing me to disclose to you information or documents obtained under section 447 of the Companies Act 1985. These statutory constraints would equally prevent me from disclosing information obtained under section 447 in the event of a formal request or requirement from the Standards and Privileges Committee.

I want, however, to do all I can to assist you and the Committee in your inquiries. It seems to me that it would be helpful for us to suggest people, companies, or institutions who may well be able to help you, whom the Standards and Privileges Committee could send for or whose papers and records they could request. These would include Arthur Andersen, the administrators of Hollis Industries plc, Mr Kevin Maxwell, and Mr Michael Stoney.

There may be other sources or avenues we could suggest, and there may be other papers held by the Department (although I am not at present aware of any) which would be relevant to the very broad lines of enquiry implied by your second paragraph. Perhaps the best way forward would be to arrange, as you suggest , a discussion. Would your staff contact our Inspector of Companies, Grahame Harp on ***, so that we can identify as precisely as possible the information you require?

27 March 2001

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